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Housing Starts

Candlefocus Editor
Housing Starts are an important economic indicator. They measure the number of new residential construction projects that begin every month. The figure is often tracked as an indicator of the state of the broader economy, as residential construction is a major component of consumer spending. A housing start is counted as soon as groundbreaking occurs and each unit in a multi-family housing project is treated as a separate housing start. Seasonally adjusted data for the latest month is compared to those of previous months to get a better sense of the direction of the housing market.

Though the changes in housing starts from one month to the next can be volatile, the longer-term trend is often a more meaningful indicator of how healthy the housing market is. Increases in housing starts tend to indicate that the economy is strong, as the demand for new housing is growing. Meanwhile, declines in housing starts suggest a slowdown in the economy, as a lack of consumer demand for homes has negative effects on other areas of the economy, such as durable goods and employment.

Housing starts are an important component of the economy, as they create jobs and have a significant impact on consumer spending. Increases in housing starts is often seen as a sign that the economy is healthy, while declines are seen as a sign of economic difficulty. As such, economists and investors pay close attention to this economic indicator to gauge broader economic health.

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